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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended: October 31, 2000 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, P.O. 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 $.10 per share) is 6,085,985 (as of October 31, 2000).
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<PAGE>
MET-PRO CORPORATION
INDEX
PART I - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Item 1. Financial Statements
<S> <C>
Condensed consolidated balance sheet as of
October 31, 2000 and January 31, 2000....................................................... 2
Condensed consolidated statement of operations for the nine-month and three-month
periods ended October 31, 2000 and 1999..................................................... 3
Condensed consolidated statement of stockholders' equity for the
nine-month periods ended October 31, 2000 and 1999.......................................... 4
Condensed consolidated statement of cash flows for the nine-month
periods ended October 31, 2000 and 1999..................................................... 5
Notes to condensed consolidated financial statements................................................ 6
Report of independent accountants................................................................... 8
Item 2. Management's discussion and analysis of the financial condition
and results of operations.................................................................... 9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings............................................................................ 13
Item 2. Changes in Securities and Use of Proceeds.................................................... 13
Item 3. Defaults Upon Senior Securities.............................................................. 13
Item 4. Submissions of Matters to a Vote of Security Holders......................................... 13
Item 5. Other Information............................................................................ 13
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits Required by Item 601 of Regulation S-K.......................................... 13
(b) Reports on Form 8-K...................................................................... 13
SIGNATURES................................................................................................... 14
</TABLE>
-1-
<PAGE>
MET-PRO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(unaudited)
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
October 31, January 31,
ASSETS 2000 2000
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Current assets
Cash and cash equivalents $ 7,900,581 $ 6,331,556
Accounts receivable, net of allowance for doubtful
accounts of approximately $258,000 and
$225,000, respectively 13,275,831 13,733,256
Inventories - Note 3 13,782,676 13,744,142
Prepaid expenses, deposits and other current assets 947,511 1,135,443
Deferred income taxes 778,574 778,574
----------------------------------------------------------------------------------------------------------------------
Total current assets 36,685,173 35,722,971
Property, plant and equipment, net 13,125,572 13,473,299
Costs in excess of net assets of businesses acquired, net 18,400,398 18,772,176
Other assets 490,092 673,537
----------------------------------------------------------------------------------------------------------------------
Total assets $68,701,235 $68,641,983
======================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
----------------------------------------------------------------------------------------------------------------------
Current liabilities
Current portion of long-term debt $ 2,016,085 $ 2,008,940
Accounts payable 4,638,066 4,989,810
Accrued salaries, wages and expenses 6,575,834 5,108,552
Payroll and other taxes payable 24,097 182,545
Dividend payable 486,879 511,299
Customers' advances 403,651 880,432
----------------------------------------------------------------------------------------------------------------------
Total current liabilities 14,144,612 13,681,578
Long-term debt 8,420,035 9,933,014
Other non-current liabilities 478,479 415,731
Deferred income taxes 383,855 405,327
----------------------------------------------------------------------------------------------------------------------
Total liabilities 23,426,981 24,435,650
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Stockholders' equity
Common stock, $.10 par value; 18,000,000 shares
authorized, 7,202,349 and 7,189,194 shares issued,
of which 1,116,364 and 797,952 shares were reacquired
and held in treasury at the respective dates 720,235 718,919
Additional paid-in capital 8,096,198 7,973,873
Retained earnings 50,325,530 46,087,476
Accumulated other comprehensive loss (679,640) (403,993)
Treasury stock, at cost (13,188,069) (10,169,942)
----------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 45,274,254 44,206,333
----------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $68,701,235 $68,641,983
======================================================================================================================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
-2-
<PAGE>
MET-PRO CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
October 31, October 31,
2000 1999 2000 1999
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $61,767,172 $59,212,504 $21,258,013 $17,846,269
Cost of goods sold 40,654,436 38,810,490 14,065,415 11,523,791
------------------------------------------------------------------------------------------------------------------------------
Gross profit 21,112,736 20,402,014 7,192,598 6,322,478
------------------------------------------------------------------------------------------------------------------------------
Operating expenses
Selling 5,469,811 5,558,747 1,780,777 1,809,594
General and administrative 6,449,342 6,083,595 2,154,300 1,957,573
------------------------------------------------------------------------------------------------------------------------------
11,919,153 11,642,342 3,935,077 3,767,167
------------------------------------------------------------------------------------------------------------------------------
Income from operations 9,193,583 8,759,672 3,257,521 2,555,311
Interest expense (534,376) (634,577) (173,695) (205,568)
Other income, net 369,224 386,456 143,340 115,070
------------------------------------------------------------------------------------------------------------------------------
Income before taxes 9,028,431 8,511,551 3,227,166 2,464,813
Provision for taxes 3,327,649 3,060,910 1,210,187 763,150
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Net income $ 5,700,782 $ 5,450,641 $ 2,016,979 $ 1,701,663
==============================================================================================================================
Earnings per share, basic (1) $ .92 $ .83 $ .33 $ .26
Earnings per share, diluted(2) $ .92 $ .82 $ .33 $ .26
Cash dividend per share - declared (3) $ .24 $ .48 $ .08 $ .08
Cash dividend per share - paid (3) $ .24 $ .40 $ .08 $ .08
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</TABLE>
(1) Basic earnings per share are based upon the weighted average
number of shares outstanding of 6,173,505 and 6,592,232 in the
nine-month periods ended October 31, 2000 and 1999, respectively,
and 6,185,487 and 6,619,678 in the three-month periods ended
October 31, 2000 and 1999, respectively.
(2) Diluted earnings per share are based on the weighted average
number of shares outstanding of 6,189,773 and 6,631,383 in the
nine-month periods ended October 31, 2000 and 1999,
respectively, and 6,200,884 and 6,660,094 in the three-month
periods ended October 31, 2000 and 1999, respectively.
(3) Effective during the second quarter of the fiscal year ended
January 31, 2000, the Company altered its historic practice of
paying annual dividends to the expected payment of quarterly
dividends. The Board of Directors declared quarterly dividends
of $.08 per share payable on March 10, 2000, June 9, 2000,
September 11, 2000 and December 8, 2000 to stockholders of
record as of February 25, 2000, May 26, 2000, August 28, 2000
and November 24, 2000, respectively. On February 22, 1999, the
Company declared a $.32 per share annual cash dividend payable
on April 23, 1999 to stockholders of record on April 9, 1999.
The Company declared quarterly dividends of $.08 per share
payable on September 10, 1999 and December 10, 1999 to
shareholders of record as of August 20, 1999 and November 26,
1999, respectively.
See accompanying notes to condensed consolidated financial statements.
-3-
<PAGE>
MET-PRO CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(unaudited)
<TABLE>
<CAPTION>
Accumulated
Additional Other
Common Paid-in Retained Comprehensive Treasury
Stock Capital Earnings (Loss) Stock Total
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balances, January 31, 2000 $718,919 $7,973,873 $46,087,476 ($403,993) ($10,169,942) $44,206,333
Comprehensive income:
Net income 5,700,782
Foreign currency translation (275,647)
Total comprehensive income 5,425,135
Dividends paid, $.16 per share (975,849) (975,849)
Dividends declared, $.08 per share (486,879) (486,879)
Proceeds from issuance of
common stock under dividend
reinvestment plan (13,155 1,316 122,325 123,641
shares)
Purchase of 318,412 shares of
treasury stock (3,018,127) (3,018,127)
------------------------------------------------------------------------------------------------------------------------------
Balances, October 31, 2000 $720,235 $8,096,198 $50,325,530 ($679,640) ($13,188,069) $45,274,254
==============================================================================================================================
Accumulated
Additional Other
Common Paid-in Retained Comprehensive Treasury
Stock Capital Earnings (Loss) Stock Total
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balances, January 31, 1999 $713,862 $7,508,748 $42,718,355 ($85,103) ($4,930,755) $45,925,107
Comprehensive income:
Net income 5,450,641
Foreign currency translation (150,837)
Total comprehensive income 5,299,804
Dividends paid, $.40 per share (2,680,881) (2,680,881)
Dividend declared, $.08 per share (511,340) (511,340)
Proceeds from issuance of
common stock under dividend
reinvestment plan (46,882
shares) 4,688 456,465 461,153
Stock option transactions (27,180) 42,180 15,000
Purchase of 453,025 shares of
treasury stock (5,239,409) (5,239,409)
------------------------------------------------------------------------------------------------------------------------------
Balances, October 31, 1999 $718,550 $7,938,033 $44,976,775 ($235,940) ($10,127,984) $43,269,434
==============================================================================================================================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
-4-
<PAGE>
MET-PRO CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
October 31,
2000 1999
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Net cash provided by operating activities $8,281,541 $7,715,350
-----------------------------------------------------------------------------------------------------------------
Cash flows from investing activities
Proceeds from sale of property and equipment 2,000 12,048
Acquisitions of property and equipment (784,322) (888,414)
Acquisitions of other intangibles -- (7,281)
-----------------------------------------------------------------------------------------------------------------
Net cash (used in) investing activities (782,322) (883,647)
-----------------------------------------------------------------------------------------------------------------
Cash flows from financing activities
Reduction of debt (1,505,834) (1,624,270)
Exercise of stock options -- 15,000
Payment of dividends (1,363,507) (2,219,728)
Purchase of treasury shares (3,018,127) (5,239,408)
-----------------------------------------------------------------------------------------------------------------
Net cash (used in) financing activities (5,887,468) (9,068,406)
-----------------------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash (42,726) (19,625)
-----------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents 1,569,025 (2,256,328)
Cash and cash equivalents at February 1 6,331,556 7,446,369
-----------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at October 31 $7,900,581 $5,190,041
=================================================================================================================
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 620,652 $ 631,011
Income taxes $2,595,536 $2,739,675
================================================================================================================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
-5-
<PAGE>
MET-PRO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - PRINCIPLES OF CONSOLIDATION
The condensed consolidated financial statements include the accounts of Met-Pro
Corporation and its wholly-owned subsidiaries Strobic Air Corporation,
Flex-Kleen Canada Inc., and Mefiag B.V. (collectively "Met-Pro" or the
"Company"). All significant intercompany accounts and transactions have been
eliminated in consolidation.
NOTE 2 - BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited condensed financial
statements contain all adjustments necessary to present fairly the financial
position as of October 31, 2000 and the results of operations for the nine-month
and three-month periods ended October 31, 2000 and 1999, and changes in
stockholders' equity and cash flows for the nine-month periods then ended. The
results of operations for the nine-month and three-month periods ended October
31, 2000 and 1999 are not necessarily indicative of the results to be expected
for the full year. These condensed consolidated financial statements should be
read in conjunction with the audited consolidated financial statements and notes
thereto contained in the Company's Annual Report on Form 10-K for the year ended
January 31, 2000.
NOTE 3 - INVENTORIES
Inventories consisted of the following:
October 31, January 31,
2000 2000
-------------- -------------
Raw materials $6,775,563 $6,755,944
Work in progress 2,021,919 2,016,612
Finished goods 4,985,194 4,971,586
-------------- -------------
$13,782,676 $13,744,142
============== =============
NOTE 4 - RECLASSIFICATIONS
Certain reclassifications have been made to the financial statements for the
nine-month and three-month periods ended October 31, 1999 to conform to the
presentation of the financial statements for the nine-month and three-month
periods ended October 31, 2000.
-6-
<PAGE>
MET-PRO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 - BUSINESS SEGMENT DATA
The Company's operations are conducted in two business segments as follows: the
manufacture and sale of product recovery/pollution control equipment, and the
manufacture and sale of fluid handling equipment.
No significant intercompany revenue is realized by either business segment.
Interest income and expense are not included in the measure of segment profit
reviewed by management. Income taxes are also not included in the measure of
segment operating profit reviewed by management.
Financial information by business segment is shown below.
<TABLE>
<CAPTION>
Nine Months Ended October 31,
2000 1999
-----------------------------------------------
<S> <C> <C>
Net sales
Product Recovery/Pollution Control Equipment $39,616,215 $39,346,224
Fluid Handling Equipment 22,150,957 19,866,280
------------ ------------
$61,767,172 $59,212,504
============ ============
Income from operations
Product Recovery/Pollution Control Equipment $ 5,325,510 $ 5,931,528
Fluid Handling Equipment 3,868,073 2,828,144
------------ ------------
$ 9,193,583 $ 8,759,672
============ ============
October 31,
2000 1999
-----------------------------------------------
Identifiable assets
Product Recovery/Pollution Control Equipment $41,216,727 $42,049,189
Fluid Handling Equipment 18,103,217 18,969,915
------------- ------------
59,319,944 61,019,104
Corporate 9,381,291 6,469,469
------------- ------------
$68,701,235 $67,488,573
============= ============
</TABLE>
NOTE 6 - ACCOUNTANTS' 10-Q REVIEW
Margolis & Company P.C., the Company's independent accountants, has performed a
limited review of the financial information included herein. Their report on
such review accompanies this filing.
-7-
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
Met-Pro Corporation
Harleysville, Pennsylvania
We have reviewed the accompanying condensed consolidated balance sheet of
Met-Pro Corporation and its wholly-owned subsidiaries as of October 31, 2000 and
the related condensed consolidated statements of operations for the nine-month
and three-month periods ended October 31, 2000 and 1999 and stockholders' equity
and cash flows for the nine-month periods ended October 31, 2000 and 1999. 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 consolidated balance sheet as of January 31, 2000 and the related
consolidated statements of operations, stockholders' equity, and cash flows for
the year then ended (not presented herein); and in our report dated February 25,
2000, 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, 2000 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
November 17, 2000
-8-
<PAGE>
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, 2000 vs Nine Months Ended October 31, 1999
Net sales for the nine-month period ended October 31, 2000 were $61,767,172
compared to $59,212,504 for the nine-month period ended October 31, 1999, an
increase of $2,554,668 or 4.3%. Sales in the Product Recovery/Pollution Control
Equipment segment were $39,616,215 or slightly higher than the nine-month period
October 31, 1999. Sales in the Fluid Handling Equipment segment were $22,150,957
or 11.5% higher compared to the nine-month period ended October 31, 1999.
Backlog at October 31, 2000 totaled $11,358,413 or 11.8% lower than the backlog
of orders on hand at October 31, 1999. In addition, the Company had $4,245,571
of orders that are not included in our backlog due to the Company's
long-standing policy of not including these orders in backlog until engineering
drawings are approved.
Net income for the nine-month period ended October 31, 2000 was $5,700,782
compared to $5,450,641 for the nine-month period ended October 31, 1999, an
increase of $250,141 or 4.6%.
The gross margin for the nine-month period ended October 31, 2000 was 34.2%
versus 34.5% for the same period in the prior year. This decrease is due to
lower gross margins experienced in the Product Recovery/Pollution Control
Equipment segment.
Selling expense decreased $88,936 during the nine-month period ended October 31,
2000 compared to the same period last year. Selling expense as a percentage of
net sales was 8.9% for the nine-month period ended October 31, 2000, compared to
9.4% for the same period last year.
General and administrative expense was $6,449,342 for the nine-month period
ended October 31, 2000 compared to $6,083,595 for the same period last year, an
increase of $365,747. General and administrative expense as a percentage of net
sales was 10.4% for the nine-month period ended October 31, 2000 compared to
10.3% for the same period last year.
Interest expense was $534,376 for the nine-month period ended October 31, 2000
compared to $634,577 for the same period in the prior year, or a decrease of
$100,201.
Other income, net, decreased $17,232 for the nine-month period ended October 31,
2000 compared to the nine-month period ended October 31, 1999.
The effective tax rate for the nine-month period ended October 31, 2000 was
36.9% compared to 36.0% for the nine-month period ended October 31, 1999.
Three Months Ended October 31, 2000 vs Three Months Ended October 31, 1999
Net sales for the three-month period ended October 31, 2000 were $21,258,013
compared to $17,846,269 for the three-month period ended October 31, 1999, an
increase of $3,411,744 or 19.1%. The sales increase can be attributed to higher
sales in both Product Recovery/Pollution Control Equipment and Fluid Handling
Equipment segments.
Net income for the three-month period ended October 31, 2000 was $2,016,979
compared to $1,701,663 for the three-month period ended October 31, 1999, an
increase of $315,316 or 18.5%. The increase in net income is related to the
higher sales volume in both Product Recovery/Pollution Control Equipment and
Fluid Handling Equipment segments.
The gross margin for the three-month period ended October 31, 2000 was 33.8%
compared to 35.4% for the same period last year. The decrease is due to lower
gross margins in the Product Recovery/Pollution Control Equipment segment.
-9-
<PAGE>
MET-PRO CORPORATION
Item 2. Management's Discussion and Analysis of the Financial Condition and
Results of Operations continued...
Selling expense decreased $28,817 during the three-month period ended October
31, 2000 compared to the same period last year. As a percentage of net sales,
selling expense decreased to 8.4% for the three-month period ended October 31,
2000 from 10.1% for the three-month period ended October 31, 1999.
General and administrative expense was $2,154,300 during the three-month period
ended October 31, 2000 compared to $1,957,573 during the three-month period
ended October 31, 1999, an increase of $196,727. General and administrative
expense for the three-month period ended October 31, 2000 was 10.1% of net
sales, compared to 11.0% of net sales for the same period last year.
Interest expense was $173,695 for the three-month period ended October 31, 2000
compared to $205,568 for the same period in the prior year, or a decrease of
$31,873.
Other income, net, increased $28,270 for the three-month period ended October
31, 2000 compared to the three-month period ended October 31, 1999.
The effective tax rate for the three-month period ended October 31, 2000 was
37.5% compared to 31.0% for the three-month period ended October 31, 1999.
Liquidity:
The Company's cash and cash equivalents were $7,900,581 on October 31, 2000
compared to $6,331,556 on January 31, 2000, an increase of $1,569,025. This
increase is the net result of the following which occurred during this
nine-month period: Positive cash flow provided by operating activities of
$8,281,541, and by proceeds received from the sale of property and equipment of
$2,000, offset by negative cash flow used in the payment of quarterly cash
dividends amounting to $1,363,507 (net of $123,641 of dividends utilized by
stockholders for stock purchases under the Dividend Reinvestment Plan), payments
on long-term debt totaling $1,505,834, purchases of treasury stock amounting to
$3,018,127, and investment in property and equipment amounting to $784,322. 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 $13,275,831 on October 31, 2000 compared
to $13,733,256 on January 31, 2000, which represents a decrease of $457,425. The
timing and size of shipments and retainage on contracts, especially in the
Product Recovery/Pollution Control Equipment segment, will influence accounts
receivable balances at any point in time.
Inventories were $13,782,676 on October 31, 2000 compared to $13,744,142 on
January 31, 2000, an increase of $38,534. Inventory balances fluctuate depending
upon market demand, the size and timing of orders, and varying lead times
required.
Current liabilities amounted to $14,144,612 on October 31, 2000 compared to
$13,681,578 on January 31, 2000, an increase of $463,034. Current portion of
long-term debt and accrued expenses, offset by a reduction in accounts payable,
other taxes payable, dividend payable, and customers' advances accounted for the
increase.
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. Cash
flows, in general, have exceeded the current needs of the Company. The Company
presently foresees no change in this situation in the immediate future.
-10-
<PAGE>
MET-PRO CORPORATION
Item 2. Management's Discussion and Analysis of the Financial Condition and
Results of Operations continued...
Capital Resources and Requirements:
Cash flows provided by operating activities during the nine-month period ended
October 31, 2000 amounted to $8,281,541, compared with $7,715,350 during the
nine-month period ended October 31, 1999, an increase of $566,191. This increase
in cash flows from operating activities was due principally to the decrease in
accounts receivable balances combined with an increase in net income and accrued
expenses offset by a decline in accounts payable and customers' advances.
Cash flows used in investing activities during the nine-month period ended
October 31, 2000 amounted to $782,322 compared with $883,647 for the nine-month
period ended October 31, 1999. The Company's investing activities principally
consist of the acquisitions of property, plant and equipment in the two
operating segments.
Financing activities during the nine-month period ended October 31, 2000
utilized $5,887,468 of available resources compared to $9,068,406 for the
nine-month period ended October 31, 1999. The 2000 activity is the result of the
payment of quarterly cash dividends amounting to $1,363,507 (net of $123,641 of
dividends utilized for stock purchases under the Dividend Reinvestment Plan),
reduction of long-term debt totaling $1,505,834, plus the purchase of treasury
stock totaling $3,018,127.
On May 11, 1999, the Company announced the initiation of a 350,000 share stock
repurchase program ("1999 Stock Repurchase Program"). The Company completed this
stock repurchase program during the nine-month period ended October 31, 2000. On
February 21, 2000 the Company announced a new stock repurchase program (the
"2000 Stock Repurchase Program") for an additional 350,000 shares or
approximately 6% of the Company's outstanding stock, to commence after all
shares have been repurchased under the 1999 Stock Repurchase Program. The new
program was initiated because in management's view the current stock price does
not reflect the true stock value. Purchases may be made from time to time in
open market transactions at the prevailing prices and in accordance with
applicable rules. The Company may discontinue the program at any time. For the
nine-month period ended October 31, 2000, the Company had repurchased a total of
318,412 shares consisting of 253,437 shares under the 2000 Stock Repurchase
Program and 64,975 shares under the 1999 Stock Repurchase Program, at a cost of
$3,018,127, or 5% of the outstanding shares, which was charged to stockholders'
equity.
Due to strong cash flows generated from operating activities in 1999, the
Company announced the change from an annual dividend, which was traditionally
paid during the month of April, to an expected quarterly dividend. Payment of
future dividends will depend on future earnings and capital requirements of the
Company and is at the discretion of the Board of Directors.
The Board of Directors declared quarterly dividends of $.08 per share payable on
March 10, 2000, June 9, 2000, September 11, 2000 and December 8, 2000 to
stockholders of record as of February 25, 2000, May 26, 2000, August 28, 2000
and November 24, 2000, respectively.
Consistent with past practices, the Company intends to continue to invest in new
product development programs and to make capital expenditures to support the
ongoing operations during the coming year. The Company expects to finance all
capital expenditure requirements through cash flows generated from operations.
-11-
<PAGE>
MET-PRO CORPORATION
Item 2. Management's Discussion and Analysis of the Financial Condition and
Results of Operations continued...
Cautionary Statement Regarding Forward-Looking Statements:
As a cautionary note to investors, the Company and its representatives may make
oral or written statements from time to time that are "forward-looking
statements". This would include information concerning possible or assumed
future activities, plans, results of operations of the Company and statements
preceded by, followed by or that include the words "anticipates", "believes",
"designed to", "estimates", "expects", "foreseeable future", "goal", "intends",
"projects", "projection", "plans", "scheduled", "should", or similar
expressions. For those statements, the Company claims the protection of the safe
harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995.
There are a number of important factors which could cause actual results to
differ materially from those anticipated. The Company believes that its future
operating results will continue to be subject to quarterly variations based upon
a wide variety of factors including the cyclical nature of both the business
segments and the markets addressed by the Company's products, price erosion,
competitive factors, the timing of new product introductions, changes in product
mix, the availability and extent of utilization of manufacturing capacity,
product obsolescence, the effectiveness of the Company's cost control programs,
the availability of suitable acquisition opportunities and the ability to
develop and implement new technologies. The Company's operating results could
also be impacted by sudden fluctuations in customer requirements, currency
exchange rate fluctuations and other economic conditions affecting customer
demand and the cost of operations in one or more of the global markets in which
the Company conducts business. As a participant in the product
recovery/pollution control and fluid handling industries, the Company operates
in a rapidly changing and highly competitive environment. The Company sells both
custom and industrial products; accordingly, changes in the conditions or
composition of any of the Company's customers may have an impact on the Company.
While the Company cannot predict what effect these various factors may have on
its financial results, the aggregate effect of these and other factors could
result in volatility in the Company's future performance and stock price.
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<PAGE>
MET-PRO CORPORATION
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities and Use of Proceeds
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submissions of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits Required by Item 601 of Regulation S-K
None
(b) Reports on Form 8-K
There were no Reports on Form 8-K filed during the nine-month period
ended October 31, 2000.
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<PAGE>
MET-PRO CORPORATIONT
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)
November 28, 2000 /s/ William L. Kacin
-----------------------------------
William L. Kacin,
Chairman, President and
Chief Executive Officer
November 28, 2000 /s/ Gary J. Morgan
-----------------------------------
Gary J. Morgan,
Vice President of Finance,
Secretary and Treasurer, Chief
Financial Officer, Chief Accounting
Officer and Director
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