MELVILLE, N.Y.,
May 12, 2022
/PRNewswire/ -- P&F Industries, Inc. (NASDAQ: PFIN) today
announced its results from operations for the three-month period
ended March 31, 2022. The Company is
reporting net revenue for the three-month period ended March 31, 2022, of $14,021,000, compared to $13,945,000 for the same three-month period in
2021. Additionally, the Company is reporting a net loss
before income taxes of $714,000,
compared to a net loss before income taxes of $377,000, for the three-month period ended
March 31, 2021. The Company is
reporting a net loss after-taxes of $618,000, compared, to a net loss after-taxes of
$307,000 for the same three-month
period a year ago. Lastly, the Company stated that its basic
and diluted loss per share for the three-month periods ended
March 31, 2022, and 2021, were
$0.19 and $0.10, respectively.
Richard Horowitz, the Company's
Chairman of the Board, Chief Executive Officer and President
commented, "Although our results for the first quarter of 2022 were
weaker than for the same period in the prior year, the numbers do
not tell the entire story. While I am pleased to report that the
integration of the previously announced acquisition of the Jackson
Gear business is proceeding on schedule, it should be noted that
during the first quarter we incurred approximately $150,000 of expenses related to this acquisition,
which are included in our selling, general and administrative
expenses. Further, these expenses are acquisition-related, and
should therefore not reoccur in the future. The Jackson Gear
business acquisition was a strategic move for P&F, as this
business will place us firmly in the larger gear market and allow
us to penetrate market sectors that were previously unattainable,
and therefore should increase the Company's overall performance in
the quarters to come."
Mr. Horowitz went on to add, "With some assistance from the
Jackson Gear business acquisition, which we completed in
January 2022, we were able to
increase both consolidated revenue, and customer open orders.
However, our consolidated gross margin fell approximately
$125,000, caused by among other
factors, increases in imported product cost, raw materials, and
direct labor, as well as higher ocean freight costs. Ocean freight
continues to reflect major increases, compared to costs in early
2021. Ocean freight costs are now more than five times the prior
year levels. Additionally, we incurred early-stage start-up
inefficiencies related to the consolidation of the Jackson Gear
acquisition, which were fully anticipated, and we believe should be
resolved around mid-year.
Mr. Horowitz further stated, "We are doing our best to navigate
through challenging times caused by the COVID-19 pandemic, rising
inflation, and ongoing global supply chain issues. Beginning in
April 2022, we passed along price
increases that substantially mitigate the negative effects in the
costs of our products that occurred during the first quarter of
2022, which we believe should improve the Company's overall results
moving forward."
Mr. Horowitz concluded, "Rest assured, we firmly believe that
P&F is on solid footing. We believe that with increased orders,
along with the growth opportunities provided by both the Jackson
Gear business acquisition and our entire company, we will get
through these challenging times stronger and more profitable.
The Company will be reporting the following
TRENDS AND UNCERTAINTIES
COVID-19 PANDEMIC
On March 11, 2020, the World
Health Organization designated the recent novel coronavirus, or
COVID-19, as a global pandemic. COVID-19 was first detected in
Wuhan City, Hubei Province, China and continued to spread, significantly
impacting various markets around the world, including the United States. Various policies and
initiatives have been implemented to reduce the global transmission
of COVID-19.
The COVID-19 virus and the resultant global economic down-turn
had a negative impact on our fiscal 2021 results and continues to
negatively impact the Company during the first quarter of
2022. Additionally, we believe the on-going supply-chain
crisis is related to a large degree to the pandemic. Beginning in
early 2021, and worsening during the latter half of 2021, we
encountered severe shipping / receiving delays of inventory /
containers from our Asian suppliers, which has caused intermittent
shortages of inventory. Further, we believe the COVID-19 global
pandemic has been and continues to be the primary factor in the
exorbitant increases in the cost of international ocean freight. In
addition, the COVID-19 pandemic has caused many of our customers
and potential customers to refuse on-site visits, which is critical
to generating revenue. We believe that until the above issues
subside, our business will likely continue to be adversely
affected.
BOEING/AEROSPACE
The Federal Aviation Administration ("FAA") and the European
Union Aviation Safety Agency ("EASA") have lifted the grounding of
the 737 MAX, however, China, which
is a large customer of Boeing, has not lifted the grounding on the
737 MAX aircraft. Boeing is currently holding completed 737
MAX aircraft destined for Chinese carriers. As a result of
the aforementioned, and airline companies limiting deliveries of
new aircraft, we believe production at Boeing of its 737 MAX
aircraft is likely to remain below the production levels that
existed prior to the onset of the COVID-19 pandemic and the
grounding of certain aircraft.
Although the 787 Dreamliner is still in production, albeit at a
reduced rate, we believe that Boeing has not been able to deliver a
new aircraft to a customer for over 1 year. The FAA is in process
of evaluating the manufacturing flaws and subsequent corrective
actions put forth by Boeing, but a firm timeline for customer
deliveries of new aircraft has not been announced.
Until these issues are fully resolved, we will likely continue
to experience an adverse effect on our revenue for the foreseeable
future. Additionally, production of military and other commercial
aircraft throughout the industry has slowed as well, which we
believe much is due to the ongoing global COVID-19 pandemic.
However, we believe when all other commercial and military
production lines throughout the United
States come back online, an increase in our revenue should
follow.
INTERNATIONAL SUPPLY CHAIN
Beginning in 2021, but magnified during the third and fourth
quarters, we encountered severe delays in receiving inventory from
our Asian suppliers, which led to intermittent shortages of
inventory. Further, during this same period and continuing into
2022, ocean freight costs have greatly increased. This trend
of higher costs and delayed deliveries have continued into
2022. We believe the major reasons for these issues include
the following:
- Increased price of fuel.
- Shortage of shipping containers.
- Congestion at the ports in Asia and the United
States; and
- Shortage of truck drivers in the
United States.
At the present time, we believe the above-mentioned supply chain
disruptions, along with increased freight and general domestic
transportation costs will likely continue during the remainder of
2022. While we believe that most of these costs have been, or will
be, passed on to our customers after the first quarter of 2022,
there is no assurance that any additional cost increases can be
passed on in the future.
INVENTORY GROWTH
Our inventory increased to $27,548,000 at March 31,
2022, from $24,021,000 at
December 31, 2021. This
increase, most of which took place at Florida Pneumatic, was due
primarily to two factors; to increase safety stock levels, and to
fulfill a large retail order that was received in late 2021 that is
scheduled to ship to during the second quarter of 2022.
We believe it was strategic to bolster our safety stock levels
of imported products due to the significant delays we encountered
during the latter portion of 2021 and early 2022, which in turn had
resulted in "out of stock" positions on several key items. Lastly,
it should be noted that inventory levels during fiscal 2020, were
suppressed due primarily to supply chain issues and production
levels being hampered by the pandemic. As such, a portion of
the inventory increase was designed to raise our inventory at all
locations to safer, pre-pandemic levels, in order to provide
necessary inventory for growth.
TECHNOLOGIES
We believe that over time, several newer technologies, and
features will have a greater impact on the market for our
traditional pneumatic tool offerings. The impact of this evolution
has been felt initially by the advent of advanced cordless operated
hand tools in the automotive aftermarket. We continue to analyze
the practicality of developing or incorporating more advanced
technologies in our tool platforms.
Other than the aforementioned, or matters that may be discussed
below, there are no major trends or uncertainties that had, or we
could have reasonably expected to have a material impact on our
revenue, nor was there any unusual or infrequent event, transaction
or any significant economic change that materially affected our
results of operations.
RESULTS OF OPERATIONS
REVENUE
The tables below provide an analysis of our net revenue for the
three-month periods ended March 31,
2022, and 2021:
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March
31,
|
|
|
|
|
|
|
|
Increase (decrease)
|
|
|
|
2022
|
|
2021
|
|
$
|
|
%
|
|
Florida
Pneumatic
|
|
$
|
10,281,000
|
|
$
|
10,901,000
|
|
$
|
(620,000)
|
|
(5.7)
|
%
|
Hy-Tech
|
|
|
3,740,000
|
|
|
3,044,000
|
|
|
696,000
|
|
22.9
|
|
Consolidated
|
|
$
|
14,021,000
|
|
$
|
13,945,000
|
|
$
|
76,000
|
|
0.5
|
%
|
Florida Pneumatic
Florida Pneumatic markets its air tool products to four primary
sectors within the pneumatic tool market; Automotive, Retail,
Aerospace and Industrial. It also generates revenue from its
Berkley products line, as well as a line of air filters and other
OEM parts ("Other").
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March
31,
|
|
|
|
2022
|
|
2021
|
|
Increase (decrease)
|
|
|
|
|
|
|
Percent of
|
|
|
|
Percent of
|
|
|
|
|
|
|
|
Revenue
|
|
revenue
|
|
Revenue
|
|
revenue
|
|
$
|
|
%
|
|
Automotive
|
|
$
|
3,881,000
|
|
37.7
|
%
|
$
|
4,102,000
|
|
37.6
|
%
|
$
|
(221,000)
|
|
(5.4)
|
%
|
Retail
|
|
|
3,020,000
|
|
29.5
|
|
|
3,790,000
|
|
34.8
|
|
|
(770,000)
|
|
(20.2)
|
|
Industrial
|
|
|
1,444,000
|
|
14.0
|
|
|
1,359,000
|
|
12.5
|
|
|
85,000
|
|
6.3
|
|
Aerospace
|
|
|
1,777,000
|
|
17.3
|
|
|
1,528,000
|
|
14.0
|
|
|
249,000
|
|
16.3
|
|
Other
|
|
|
159,000
|
|
1.5
|
|
|
122,000
|
|
1.1
|
|
|
37,000
|
|
30.3
|
|
Total
|
|
$
|
10,281,000
|
|
100.0
|
%
|
$
|
10,901,000
|
|
100.0
|
%
|
$
|
(620,000)
|
|
(5.7)
|
%
|
When comparing the three-month periods ended March 31, 2022, and 2021, the most significant
change in Florida Pneumatic's revenue occurred within its Retail
sector. The fall-off was due primarily to reduced volume in
the sale of "spray guns" during the first quarter of 2022, compared
to the same period in 2021. We believe that The Home Depot's
("THD"s) purchase level of spray guns during the COVID-19 pandemic
(2020 and 2021) were likely used by their customers to sanitize
large areas. Accordingly, as the pandemic appears to have subsided
somewhat, the need for this tool used to combat the virus has
diminished. Additionally, THD discontinued eight items, which
contributed to the decline in revenue. It should be noted
that many of the discontinued items will be replaced with a
"roll-out" scheduled to ship during the second quarter of 2022,
consisting of six new items. Further, we believe
revenue from the new six items should greatly offset the decline
from the discontinued items. Although our Automotive revenue
declined this quarter, compared to the same period in 2021, as the
result in a change in a distribution channel strategy, the gross
margin related to our Automotive revenue has increased. Aerospace
revenue improved 16.3%, when comparing the first quarter of 2022
and 2021. This improvement was driven by an overall increase in
demand throughout the sector.
Hy-Tech
Hy-Tech designs, manufactures, and sells a wide range of
industrial products which are categorized as ATP for reporting
purposes. In addition to Engineered Solutions, products and
components manufactured for other companies under their brands are
included in the OEM category in the table below. PTG revenue is
comprised of products manufactured and sold by Hy-Tech's gear
business. NUMATX, Thaxton and other peripheral product lines, such
as general machining, are reported as Other.
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March
31,
|
|
|
|
2022
|
|
2021
|
|
Increase (decrease)
|
|
|
|
|
|
|
Percent of
|
|
|
|
|
Percent of
|
|
|
|
|
|
|
|
|
Revenue
|
|
revenue
|
|
Revenue
|
|
revenue
|
|
$
|
|
%
|
|
OEM
|
|
$
|
1,965,000
|
|
52.6
|
%
|
$
|
1,611,000
|
|
52.9
|
%
|
$
|
354,000
|
|
22.0
|
%
|
PTG
|
|
|
940,000
|
|
25.1
|
|
|
646,000
|
|
21.2
|
|
|
294,000
|
|
45.5
|
|
ATP
|
|
|
742,000
|
|
19.8
|
|
|
713,000
|
|
23.4
|
|
|
29,000
|
|
4.1
|
|
Other
|
|
|
93,000
|
|
2.5
|
|
|
74,000
|
|
2.5
|
|
|
19,000
|
|
25.7
|
|
Total
|
|
$
|
3,740,000
|
|
100.0
|
%
|
$
|
3,044,000
|
|
100.0
|
%
|
$
|
696,000
|
|
22.9
|
%
|
During the first quarter of 2022, Hy-Tech continued to see signs
that the ill effects of the pandemic were beginning to ease.
Customer orders for all of its major product lines improved when
compared to the same three-month period a year ago. Its OEM product
line growth was due in large part to a general rebound in the
pneumatic tool sector, with increased shipments to two large
customers. The growth in PTG revenue was due to the acquisition of
the Jackson Gear Company business ("JGC"). Its added revenue
was partially offset by a decline in orders from a large customer.
The increase in Hy-Tech's Other revenue was due to NUMATX
growth.
GROSS MARGIN/PROFIT
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|
|
|
|
|
|
|
|
|
|
Three months ended March 31
,
|
|
Increase
|
|
|
|
2022
|
|
2021
|
|
Amount
|
|
|
%
|
|
Florida
Pneumatic
|
|
$
|
3,949,000
|
|
$
|
4,200,000
|
|
$
|
(251,000)
|
|
|
(6.0)
|
%
|
As percent of
respective revenue
|
|
|
38.4
|
%
|
|
38.5
|
%
|
|
(0.1)
|
%
|
pts
|
|
|
Hy-Tech
|
|
$
|
562,000
|
|
$
|
436,000
|
|
$
|
126,000
|
|
|
28.9
|
|
As percent of
respective revenue
|
|
|
15.0
|
%
|
|
14.3
|
%
|
|
0.7
|
%
|
pts
|
|
|
Total
|
|
$
|
4,511,000
|
|
$
|
4,636,000
|
|
$
|
(125,000)
|
|
|
(2.7)
|
%
|
As percent of
respective revenue
|
|
|
32.2
|
%
|
|
33.2
|
%
|
|
(1.0)
|
%
|
pts
|
|
|
The minimal decline in Florida Pneumatic's gross margin this
quarter, compared to the same three-month period in the prior year
was due primarily to product mix. Ocean freight costs continue to
adversely affect our gross margin, particularly at Florida
Pneumatic where we are still encountering container costs that are
four to five times greater than a year ago. We are attempting to
pass through a most if not all of these increases; however, we may
not be able to fully neutralize the negative effects.
The improvement in Hy-Tech's gross margin is due primarily to
its overall product/customer mix. However, its manufacturing
overhead absorption at PTG suffered during the quarter, as we are
in the process of integrating the Jackson Gear Company
acquisition. We expect that the major integration items
should be resolved during the second half of 2022 and thus improve
gross margin as well.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses ("SG&A")
include salaries and related costs, commissions, travel,
administrative facilities costs, communications costs and
promotional expenses for our direct sales and marketing staff,
administrative and executive salaries and related benefits, legal,
accounting, and other professional fees as well as general
corporate overhead and certain engineering expenses.
During the first quarter of 2022, our SG&A was $5,173,000, compared to $4,991,000 incurred during the same three-month
period in 2021. There were three significant factors contributing
to the net increase. First, compensation expense increased
$188,000. Compensation expense is
comprised of base salaries and wages, accrued performance-based
bonus incentives and associated payroll taxes and employee
benefits. Several factors contributed to this increase, among
them the staffing added in connection with the JGC acquisition,
increased wages primarily related to retention incentives and
annual wage adjustments and increases in companywide
bonus/incentive/performance accruals. Secondly, professional fees
and expenses increased $233,000, due
primary to legal, accounting, and other fees incurred in connection
with the JGC acquisition. Other expenses that contributed to this
$233,000 increase were cyber security
related costs and recruitment fees. Lastly, partially offsetting
the above increases was a reduction of $273,000 in our variable expenses. Variable
expenses include among other items, commissions, freight out,
travel, advertising, shipping supplies and warranty costs.
Driving this decline were significantly lower advertising and
shipping costs at Florida Pneumatic, caused by a change in a
distribution channel strategy.
INTEREST
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March
31,
|
|
Increase
(decrease)
|
|
|
|
2022
|
|
2021
|
|
Amount
|
|
%
|
|
Interest expense
attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
48,000
|
|
$
|
10,000
|
|
$
|
38,000
|
|
380.0
|
%
|
PPP loan
|
|
|
—
|
|
|
8,000
|
|
|
(8,000)
|
|
(100.0)
|
|
Amortization expense of
debt issue costs
|
|
|
4,000
|
|
|
4,000
|
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
52,000
|
|
$
|
22,000
|
|
$
|
30,000
|
|
136.4
|
%
|
Our borrowings increased during the three-month period ended
March 31, 2022, compared to the same
period in the prior year. This increase was driven primarily by the
decision to increase safety stock levels on inventory and the
acquisition in 2022 of the Jackson Gear Company business.
The average balance of short-term borrowings during the
three-month periods ended March 31,
2022, and 2021, were $10,157,000 and $2,167,000, respectively.
Debt issue costs are associated with an amendment to the Credit
Agreement. There were no amortizable debt issue costs
incurred with Amendment No. 9, to the Credit Agreement.
INCOME TAXES
At the end of each interim reporting period, we compute an
effective tax rate based upon our estimated full year results. This
estimate is used to determine the income tax provision or benefit
on a year-to-date basis and may change in subsequent interim
periods. Accordingly, the effective tax rate for the three-month
periods ended March 31, 2022, and
2021, were approximately a tax benefit of 13.4%, and 18.6%,
respectively. The effective tax rates for all periods presented
were impacted primarily by state taxes, and non-deductible
expenses. Additionally, impacting 2021's net effective tax benefit
was the enactment of the Coronavirus Aid, Relief, and Economic
Security Act.
LIQUIDITY AND CAPITAL RESOURCES
We monitor such metrics as days' sales outstanding, inventory
requirements, inventory turns, estimated future purchasing
requirements and capital expenditures to project liquidity needs,
as well as evaluate return on assets. Our primary sources of funds
are operating cash flows, existing working capital and our Revolver
Loan ("Revolver") with our Bank.
We gauge our liquidity and financial stability by various
measurements, some of which are shown in the following table:
|
|
|
|
|
|
|
|
|
March 31,
2022
|
|
December 31, 2021
|
Working
capital
|
|
$
|
22,375,000
|
|
$
|
24,598,000
|
Current
ratio
|
|
|
2.15 to 1
|
|
|
3.04 to 1
|
Shareholders'
equity
|
|
$
|
43,181,000
|
|
$
|
43,840,000
|
Credit facility
We and the Bank entered into an amendment in April 2022 that, among other things, increased
the Revolver borrowing commitment by $2,000,000 to $18,000,000 through June
30, 2022.
At March 31, 2022, there was
approximately $3,360,000 available to
us under our Revolver arrangement.
Should the need arise whereby the current Credit Agreement is
insufficient; we believe that the current Agreement could be
expanded, and/or we could obtain additional funds based on the
value of our real property.
Cash flows
For the three-month period ended March
31, 2022, cash used by operating activities was $3,972,000, compared to cash used by operating
activities for the year ended December 31,
2021, of $4,149,000. At
March 31, 2022, our consolidated cash
balance was $642,000, compared to
$539,000 at December 31, 2021. Cash at our UAT subsidiary was
$190,000 at March 31, 2022, and December 31, 2021, respectively. We operate under
the terms and conditions of the Credit Agreement. As a result, all
domestic cash receipts are remitted to Capital One lockboxes.
Our total debt to total book capitalization (total debt divided
by total debt plus equity) on March 31,
2022, was 22.5%, compared to 11.6% on December 31, 2021.
Our working capital needs will increase due to anticipated
growth, and a roll-out of a new tools program to our Retail
customer. As a result, our Revolver borrowings will likely increase
in the first half of 2022 and should then decline throughout the
remainder of 2022.
During the three-month period ended March
31, 2022, we completed the JGC acquisition, with a purchase
price of $2,300,000, plus acquisition
expenses that included among other things, legal, accounting, and
relocation expenses.
During the three-month period ended March 31, 2022, we used
$380,000 for capital expenditures,
compared to $68,000 during the same
period in the prior year. Capital expenditures currently
planned for the remainder of 2022 are approximately $800,000, which we expect will be financed
through the Credit Facility.
The major portion of these planned capital expenditures will be
for new metal cutting equipment, tooling and information technology
hardware and software, and the expansion of our Punxsutawney, PA facility as a result of the
acquisition of Jackson Gear.
Our liquidity and capital is primarily sourced from our credit
facility, and cash from operations.
IMPACT OF INFLATION
Increasing prices, most notably in freight/transportation and,
to a lesser extent, the cost of raw materials and labor had a
material effect on our results of operations during the three-month
period ended March 31, 2022. We
believe that the current and projected significant increases of
inflation, the on-going volatility of freight/transportation costs,
and recent geopolitical unrest will have an impact on our results
of operations during 2022. At the present time we are unable
to reasonably estimate said impact on our results of operations for
the remainder of 2022 and beyond.
ABOUT P&F INDUSTRIES, INC.
P&F Industries, Inc., through its wholly owned subsidiaries,
is a leading manufacturer and importer of air-powered tools and
accessories sold principally to the aerospace, industrial,
automotive, and retail markets. P&F's products are sold
under its own trademarks, as well as under the private labels of
major manufacturers and retailers.
OTHER INFORMATION
P&F Industries Inc. has scheduled a conference call later
today at 11:00 A.M. Eastern Time, to
discuss its fiscal 2021 results and financial condition.
Investors and other interested parties who wish to listen to or
participate can dial 1-888-394-8218. It is suggested you call at
least 10 minutes prior to the call commencement. For those
who cannot listen to the live broadcast, a replay of the call will
also be available on the Company's website beginning on or about
May 13, 2022.
Forward Looking Statements
The Private Securities Litigation Reform Act of 1995 (the
"Reform Act") provides a safe harbor for forward-looking statements
made by or on behalf of P&F Industries, Inc., and
subsidiaries ("P&F", or the "Company"). P&F and its
representatives may, from time-to-time, make written or verbal
forward-looking statements, including statements contained in the
Company's filings with the Securities and Exchange Commission and
in its reports to shareholders. Generally, the inclusion of the
words "believe," "expect," "intend," "estimate," "anticipate,"
"will," "may," "would," "could," "should," and their opposites and
similar expressions identify statements that constitute
"forward-looking statements" within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 and that are intended to come
within the safe harbor protection provided by those sections. Any
forward-looking statements contained herein, including those
related to the Company's future performance, are based upon the
Company's historical performance and on current plans, estimates
and expectations. All forward-looking statements involve risks and
uncertainties. These risks and uncertainties could cause the
Company's actual results for all or part of the 2022 fiscal year
and beyond to differ materially from those expressed in any
forward-looking statement made by or on behalf of the Company for a
number of reasons including, but not limited to:
- Risks related to the global outbreak of COVID-19 and other
public health crises;
- Risks associated with sourcing from overseas;
- Disruption in the global capital and credit markets;
- Importation delays;
- Customer concentration;
- Unforeseen inventory adjustments or changes in purchasing
patterns;
- Market acceptance of products;
- Competition;
- Price reductions;
- Exposure to fluctuations in energy prices;
- The strength of the retail economy in the United States and abroad;
- Risks associated with Brexit;
- Adverse changes in currency exchange rates;
- Interest rates;
- Debt and debt service requirements;
- Borrowing and compliance with covenants under our credit
facility;
- Impairment of long-lived assets and goodwill;
- Retention of key personnel;
- Acquisition of businesses;
- Regulatory environment;
- Litigation and insurance;
- The threat of terrorism and related political instability and
economic uncertainty; and
- Business disruptions or other costs associated with information
technology, cyber-attacks, system implementations, data privacy or
catastrophic losses,
and those other risks and uncertainties described in its most
recent Annual Report filed on Form 10-K, its Quarterly Reports
on Form 10-Q, and its other reports and statements filed by
the Company with the Securities and Exchange Commission.
Forward-looking statements speak only as of the date on which they
are made. The Company undertakes no obligation to update publicly
or revise any forward-looking statement, whether as a result of new
information, future developments or otherwise. The Company cautions
you against relying on any of these forward-looking
statements.
P & F
INDUSTRIES, INC. AND SUBSIDIARIES
|
|
|
|
|
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
|
|
|
(In Thousands
$)
|
March 31,
2022
|
December 31,
2021
|
|
(Unaudited)
|
(Audited)
|
Assets
|
|
|
Cash
|
|
$
|
642
|
|
|
$
|
539
|
|
Accounts receivable -
net
|
|
|
9,043
|
|
|
|
7,550
|
|
Inventories
|
|
|
27,548
|
|
|
|
24,021
|
|
Prepaid expenses and
other current assets
|
|
|
4,558
|
|
|
|
4,566
|
|
|
|
|
|
|
|
|
|
|
Total current
assets
|
|
|
41,791
|
|
|
|
36,676
|
|
|
|
|
|
|
|
|
|
|
Net property and
equipment
|
|
|
8,818
|
|
|
|
8,080
|
|
Goodwill
|
|
|
5,275
|
|
|
|
4,447
|
|
Other intangible assets
- net
|
|
|
5,427
|
|
|
|
5,592
|
|
Deferred income taxes -
net
|
|
|
446
|
|
|
|
349
|
|
Right-of-use assets –
operating leases
|
|
|
3,771
|
|
|
|
2,969
|
|
Other assets –
net
|
|
|
73
|
|
|
|
77
|
|
Total
assets
|
|
$
|
65,601
|
|
|
$
|
58,190
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
12,522
|
|
|
$
|
5,765
|
|
Accounts
payable
|
|
|
3,845
|
|
|
|
2,920
|
|
Accrued compensation
and benefits
|
|
|
790
|
|
|
|
1,475
|
|
Accrued other
liabilities
|
|
|
1,350
|
|
|
|
1,078
|
|
Current leased
liabilities – operating leases
|
|
|
909
|
|
|
|
840
|
|
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
19,416
|
|
|
|
12,078
|
|
|
|
|
|
|
|
|
|
|
Noncurrent leased
liabilities – operating leases
|
|
|
2,915
|
|
|
|
2,176
|
|
Other
liabilities
|
|
|
89
|
|
|
|
96
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
22,420
|
|
|
|
14,350
|
|
|
|
|
|
|
|
|
|
|
Total shareholders'
equity
|
|
|
43,181
|
|
|
|
43,840
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
|
$
|
65,601
|
|
|
$
|
58,190
|
|
|
|
|
|
|
|
|
|
|
P & F
INDUSTRIES, INC., AND SUBSIDIARIES
|
|
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS (UNAUDITED)
|
|
|
|
|
|
|
Three months Ended
March 31,
|
|
|
(In Thousands
$)
|
2022
|
2021
|
|
|
|
|
|
|
|
|
Net revenue
|
$
|
14,021
|
$
|
13,945
|
|
|
|
|
|
Cost of
sales
|
9,510
|
9,309
|
|
|
|
Gross profit
|
4,511
|
4,636
|
|
|
|
Selling, general and
administrative expenses
|
5,173
|
4,991
|
|
|
|
Operating
loss
|
(662)
|
(355)
|
|
|
|
Interest
expense
|
(52)
|
(22)
|
|
|
|
Loss before income
taxes
|
(714)
|
(377)
|
|
|
|
Income tax
benefit
|
96
|
70
|
|
|
|
Net loss
|
$
(618)
|
$
(307)
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P&F
INDUSTRIES, INC., AND SUBSIDIARIES
|
|
Three months
Ended
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)
|
|
March
31,
|
|
(In Thousands
$)
|
|
2022
|
|
|
2021
|
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(618)
|
|
|
$
|
(307)
|
|
|
|
|
|
|
|
|
|
|
Adjustments to
reconcile net income (loss) to net cash (used in) provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash and other
charges:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
443
|
|
|
|
451
|
|
Amortization of other intangible assets
|
|
|
157
|
|
|
|
159
|
|
Operating lease expense
|
|
|
232
|
|
|
|
224
|
|
Amortization of debt issue costs
|
|
|
4
|
|
|
|
4
|
|
Amortization of consideration payable to a
customer
|
|
|
67
|
|
|
|
67
|
|
(Recovery of) provision for losses on accounts
receivable
|
|
|
(12)
|
|
|
|
47
|
|
Stock-based compensation
|
|
|
1
|
|
|
|
2
|
|
Restricted stock-based compensation
|
|
|
8
|
|
|
|
13
|
|
Deferred income taxes
|
|
|
(102)
|
|
|
|
(70)
|
|
Loss on disposal of fixed assets
|
|
|
---
|
|
|
|
2
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(844)
|
|
|
|
(2,113)
|
|
Inventories
|
|
|
(3,243)
|
|
|
|
(263)
|
|
Prepaid expenses and other current assets
|
|
|
(144)
|
|
|
|
335
|
|
Accounts payable
|
|
|
716
|
|
|
|
(483)
|
|
Accrued compensation and benefits
|
|
|
270
|
|
|
|
372
|
|
Accrued other liabilities and other current
liabilities
|
|
|
(672)
|
|
|
|
(97)
|
|
Operating lease liabilities
|
|
|
(226)
|
|
|
|
(219)
|
|
Other liabilities
|
|
|
(9)
|
|
|
|
(20)
|
|
Total
adjustments
|
|
|
(3,354)
|
|
|
|
(1,589)
|
|
Net cash used in by
operating activities
|
|
|
(3,972)
|
|
|
|
(1,896)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
$
|
(380)
|
|
|
$
|
(68)
|
|
Purchase of net assets
of the Jackson Gear Company business
|
|
|
(2,300)
|
|
|
|
---
|
|
Net cash used in
investing activities
|
|
|
(2,680)
|
|
|
|
(68)
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
|
|
Net proceeds from
short-term borrowings
|
|
|
6,757
|
|
|
|
2,107
|
|
Net cash provided by
financing activities
|
|
|
6,757
|
|
|
|
2,107
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash
|
|
|
(2)
|
|
|
|
---
|
|
Net increase in
cash
|
|
|
103
|
|
|
|
143
|
|
Cash at beginning of
period
|
|
|
539
|
|
|
|
904
|
|
Cash at end of
period
|
|
$
|
642
|
|
|
$
|
1,047
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P&F
INDUSTRIES, INC. AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS (unaudited)
(continued)
|
|
|
|
|
|
|
|
|
(In Thousands
$)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid
for:
|
|
|
|
|
|
Interest
|
|
$
|
36
|
|
|
$
|
8
|
|
|
Cash paid for amounts
included in the measurement of operating lease
liabilities
|
|
$
|
---
|
|
|
$
|
2
|
|
|
|
|
|
|
|
|
|
|
|
Noncash
information:
|
|
|
|
|
|
|
|
|
Right of Use ("ROU")
assets recognized for new operating lease liabilities
|
|
$
|
987
|
|
|
$
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
P & F
INDUSTRIES, INC., AND SUBSIDIARIES
|
NON-GAAP FINANCIAL
MEASURE AND RECONCILIATION
|
|
COMPUTATION OF
(EBITDIA) - EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION,
IMPAIRMENT, AND AMORIZATION
|
(UNAUDITED)
|
|
|
|
(In Thousands
$)
|
|
For the Three Months
Ended March 31,
|
|
|
|
|
2022
|
|
|
|
2021
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(618)
|
|
|
$
|
(307)
|
|
|
|
|
|
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
and
amortization
|
|
|
600
|
|
|
|
610
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
52
|
|
|
|
22
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
|
(96)
|
|
|
|
(70)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (1)
|
|
$
|
(62)
|
|
|
$
|
255
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The Company discloses a
tabular comparison of EBITDIA, which is a non-GAAP measure because
it is instrumental in comparing the results from period to
period. The Company's management believes that the comparison
of EBITDIA provides greater insight into the Company's results of
operations for the periods presented. EBITDIA should not be
considered in isolation or as a substitute for operating income as
reported on the face of our statement of operations
|
View original
content:https://www.prnewswire.com/news-releases/pf-industries-inc-reports-results-for-the-three-month-period-ended-march-31-2022-301545775.html
SOURCE P&F Industries, Inc.